gracchusdixit

The Affordable Care Act, a.k.a. “Obamacare,” is in trouble.  Although the new law is a well-intentioned and long-overdue attempt to fix what’s wrong with our dysfunctional system of health care, its implementation has stumbled and stumbled badly.   This has been a gift to the Republicans who are fighting tooth and nail to kill the law and a major embarrassment to the Democrats who are struggling to preserve it.

Everyone concedes that the initial roll-out of the federal insurance exchange was a technological debacle.  The problems may yet be fixable, or they may not.  That remains to be seen.  Even worse, perhaps, is the fact those who wrote the law failed to anticipate that individual insurance policies might be cancelled outright because they did not meet its coverage standards.   In the overall scheme of things, the cancellations haven’t affected that many people, but there have been enough of them to make the President seem like a liar.

The resulting confusion, frustration, and rage mean that implementation of the law is way behind schedule.  If enrollments don’t picking up around soon, it is doubtful that the law will be financially viable, because the insurance “pool” on which its success is predicated simply won’t be big enough.  Premiums will continue to skyrocket, and the Affordable Care Act could end up as an unaffordable catastrophe.

Those who so desperately want the Affordable Care Act to succeed have focused all their attention on curing the immediate problems before things get completely out of hand.   A “tech surge” has been launched to fix the website, and Democrats in Congress are now talking about giving insurance companies another year to offer policies that don’t meet the required standards—despite the fact that such a step would only make the situation worse in the long term by destabilizing the financial assumptions of the “pool.”

The trouble is, these steps merely attack two symptoms of the law’s fundamental flaw.  No attempt to medicate the symptoms will cure the disease.

The ultimate problem with the Affordable Care Act is that it tinkers with, but does little to change, our reliance on a hopelessly complex and inefficient market and, in particular, on the insurance market.  On the contrary, by treating decent and affordable health care as an “insurance problem,” the Act preserves the underlying dynamic that has made our system of health care one of the least effective and, by far, the most expensive in the world.  You simply cannot treat health care as a for-profit business and expect to get quality care at an affordable price.  It is the market itself that makes such an outcome impossible.

Those who support the law point to the supposedly successful example of the insurance exchange set up in Massachusetts by (of all people) Mitt Romney.  The analogy is irrelevant.  Massachusetts is one state, a single jurisdiction, with arguably the best medical infrastructure in the nation and a limited number of insurance providers.  Extending such a system to the nation as a whole is far more complex.

The only truly national component of our health care system is Medicare.  Everything else—hospitals, physicians, insurance companies, even Medicaid—is handled (if you can call it that) at the state level.  Across the fifty states, there are thousands of insurers, hundreds of thousands of health care providers, and countless conflicting interests.  To think that an “exchange” could somehow rationalize this complexity was, and is, naive at best.   Technical “glitches” aside, that’s one reason the federal exchange has run into so many problems.  Apparently, no one foresaw that so many states would simply “opt out,” leaving the federal government to create and manage the market by itself.

The market is a wonderful mechanism, and it does many things well, but health care isn’t one of them.  Left to its own devices, the market will inevitably go where the money is.  That’s what markets do.  That’s what they’re supposed to do.  And that’s why our system of health care is bankrupting the country.

Until we at long last realize that health care is an essential public service and a national obligation, until we stop treating it as an “insurance problem,” we will never rid the current system of what ails it.  We don’t need “insurance exchanges.”  We need to exchange a system that doesn’t work for one that does.  Thanks to the problems of the Affordable Care Act, that day isn’t likely to come any time soon.